Plz fix: Subscription clothing company Stitch Fix is struggling

1/5/23 7:00PM

Plz fix

‍Online personal stylist Stitch Fix is cutting 20% of its workforce and parting ways with CEO Elizabeth Spaulding, after sales slowed and shares shed more than half their value last year.

Always on-trend, Stitch Fix is now following in the footsteps of giants like Disney and Starbucks by electing former CEO Katrina Lake, who founded the company, to step back up to the top job.

Lake founded Stitch Fix in 2011 while studying for an MBA. The company started with just 29 clients, most of whom were friends of the founder, with each box of clothes delivered in-person by Lake herself. That concept proved popular and the offering scaled to where it is today, where users leave their fashion fate in the hands of algorithms and stylists, receiving garments delivered to their door at frequencies they choose.

‍So last season

‍Using data to pick trends and garments propelled Stitch Fix to more than $2bn of sales in 2021, boosted by COVID which shifted many people’s shopping habits online. However, even in that record-breaking year, operating losses had already begun to mount and — after Katrina Lake stepped down as CEO in August 2021 — sales stalled, leaving the company with a $208m loss last year.

Whether Stitch Fix users have become subscription fatigued, grown wary of the ever-growing influence algorithms hold in everyday life, or simply have a stronger desire to get more agency in their clothing choices, it’s clear that algo-picked apparel is out of fashion... for now at least.

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.